Ms. PHYLLIS COPT (Listener): And I took a 50-percent lump sum from the Kansas Retirement Fund, and I put it in a self-directed IRA with Ed Jones.

NPR: Listeners' Money Questions Answered

Smaller companies may do the same, but are more likely to allow self-direction of investments, allowing the participant to choose among stocks, bonds, mutual funds and other available investments, similar to the investment options available in a self-directed IRA. If investments in the 401(k) are limited, Casey will need to decide whether he prefers to contribute to an IRA, which would provide a broader range of investments from which to choose.

FORBES: Which Retirement Plan Is Best?

There are two other non-retirement custodial accounts that operate in a similar fashion to a Roth IRA and can be self-directed: Coverdell Education Savings Accounts (ESAs) and Health Savings Accounts (HSAs).

FORBES: Sipping The Alphabet Soup Of Retirement Savings